U.S. stocks edge up; Syria neutralizes data

Benchmark indexes dial back gains as Obama talks military moves

By

KateGibson

NEW YORK (MarketWatch) — U.S. stocks rose modestly on Tuesday after upbeat data on global manufacturing and as the White House lobbied Congress for a U.S. military response to Syria’s use of chemical weapons.

Microsoft Corp.
MSFT, +1.57%
and Verizon Communications Inc.
VZ, +0.70%
weighed on the Dow Jones Industrial Average following major acquisitions by both industry giants.

“We’re looking at two days of trading wrapped into one. This morning we caught up with what world markets had done in our absence, the pent-up celebration of economic data out of Europe and Asia,” Art Hogan, market strategist at Lazard Capital Markets, said of the morning jump that had the Dow industrials
DJIA, +0.72%
rising 123 points.

Microsoft to buy Nokia mobile unit

(3:17)

Paul Vigna joins the News Hub with a look at today's market action, including three stocks to watch. Photo: AP.

But stock indexes significantly cut their gains as President Barack Obama called for a quick congressional vote on his proposal for limited U.S. military action against Syria.

The Dow industrials rose 23.65 points, or 0.2%, to 14,833.96.

Microsoft shares fell 4.6% after the Dow component and software giant agreed to pay $7.2 billion for Nokia Corp.’sNOK, +0.87%
main handset business. Nokia’s Stephen Elop will return to the U.S. firm as head of its wireless-devices business amid talk he could replace Microsoft’s retiring CEO Steve Ballmer. Shares of Nokia rallied 31%.

Verizon fell 2.9% a day after the telecommunications company and Dow component agreed to buy Vodafone Group PLC’s
VOD, +0.68%VOD, +0.03%
45% stake in Verizon Wireless for $130 billion.

On the New York Mercantile Exchange, crude futures
US:CLV3
rose 89 cents, or 0.8%, to $108.54 a barrel and gold futures
US:CLV3
rose $15.90, or 1.1%, to $1,412 an ounce, settling higher for the first trading session in four.

On Capitol Hill, Secretary of State John Kerry and Defense Secretary Chuck Hagel testified before a Senate Committee hearing on Syria.

“In general, markets go down until the missiles fly and then rebound,” noted Hogan from Lazard Capital Markets.

“We’re more worried about Syria. The markets reacted very well to economic data out of China and Europe over the weekend and yesterday, and our data was pretty good as well, but it looks like we started fading from early gains as Obama was talking about his goals for Syria,” said Paul Nolte, managing director at Dearborn Partners.

“It hasn’t gone well for us in that region,” said Nolte of U.S. military intervention in the Middle East.

Speaking Tuesday during a meeting with congressional leaders at the White House, Obama called on lawmakers to promptly weigh in on a U.S. response to Syria’s use of chemical weapons that killed more than 1,400 civilians last month. House Speaker John Boehner voiced support for Obama’s request, with the Ohio Republican saying “the use of these weapons has to be responded to and only the U.S. has the capability.”

The debate over the U.S. response to the attack in a Damascus suburb two weeks ago overshadowed better-than-expected economic reports.

A separate report had construction spending rising 0.6% in July, with both better than expected.

“We’re looking at an economy that is continuing to do reasonably well, and it looks as though we’ll see tapering with the September meeting,” said Nolte of the Federal Open Market Committee gathering on Sept. 17-18.

Thoughts of the Federal Reserve scaling back its $85 billion in monthly bond purchases “is still causing stocks to be volatile, and certainly bonds are, but as we go through time, stock investors are getting more comfortable with it,” Nolte added.

Global stocks climbed on Monday, a U.S. holiday, after reports had Chinese manufacturing rising in August and euro-area factory production expanding at a more rapid pace than first estimated in August.

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